Kumaresan Selvaraj pillai


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Thursday, September 13, 2012

Commodity Blog

Commodity Blog


Will Zinc Glut Shrink?

Posted: 12 Sep 2012 01:39 PM PDT

Zinc prices were falling this year as output exceeded consumption, but are poised for rebound after Chinese producers cut their output as low prices made production unprofitable. Supply has outpaced demand since 2007 after prices had surged to a record, spurring increased production. As a result, LME-monitored stockpiles swelled above 1 million tons for the first time in history. The glut may decline as output of the metal from China fell by 6.8 percent in the first seven months of 2012, according to the data of Beijing Antaike Information Development Co.

The metal has dropped 20 percent in the five months to June 27, but rallied 15 percent since then, resulting in the overall gain of 9.2 percent this year. The gains of zinc followed the rally of stocks and commodities. The Standard & Poor's GSCI Index of 24 raw materials has advanced 5.7 percent and the MSCI All-Country World Index of shares has rallied 11 percent.

Futures for delivery of zinc in three months traded at $2,003.00 per metric ton on LME today.
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Posted on Commodity blog.

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